In her address during her visit to the US, Finance Minister Nirmala Sitharaman emphasized the Centre’s commitment to reducing business costs, especially for MSMEs (Micro, Small, and Medium Enterprises). According to the Minister, deregulation will act as a powerful catalyst for industrial growth, enabling businesses to thrive in a more competitive environment. This aligns with the vision of creating a flexible labour law system, transparent land markets, and a simplified tax regime to foster business development. Sitharaman stated that these reforms would require collaboration between the Centre and state governments to achieve a seamless regulatory framework that supports industrial growth.
Supporting MSMEs for Global Competitiveness
India's MSME sector is crucial for the nation's manufacturing strength and job creation. The government has implemented several initiatives to support MSMEs, including providing easier access to credit, reducing compliance burdens, and facilitating prompt payment from large buyers. Sitharaman pointed to the success of the Open Network for Digital Commerce (ONDC), which has already enrolled over 7.64 lakh vendors across 616 cities. Moving forward, the government aims to reduce regulatory friction, digitize approvals, and integrate MSMEs into the global value chain. Special focus will be placed on empowering women-led and rural enterprises, ensuring more inclusive economic growth across India.
India’s Thriving Startup Ecosystem
The Finance Minister highlighted the vibrant startup ecosystem in India as a key driver of economic growth. She pointed out that Indian first-generation immigrants have founded 72 unicorns in the US between 2018 and 2023, valued at $195 billion and employing over 55,000 people. These unicorns are vital to strengthening the India-US economic relationship, with the US being a major investor in Indian startups. Sitharaman also mentioned the role of Global Capability Centres (GCCs) in India, with more than 65% of them headquartered in the US, providing high-value services such as R&D, management consulting, and auditing.
The government’s efforts over the last decade to reduce entrepreneurial risk through regulatory and infrastructural reforms have helped India become second globally in innovation quality among middle-income economies. These reforms include simplifying 57 startup-related regulations, allowing India to now rank top in the quality of scientific publications and universities.
Harnessing Demographic Dividend
Sitharaman pointed out that 65% of India’s population is under the age of 35, creating a unique opportunity to leverage this demographic advantage. However, she stressed that this can only be realized if the country aligns education and skill development with the demands of industry 4.0. India is striving to educate and empower this generation to not only work in emerging industries but also lead them, ensuring sustained economic growth and a competitive edge in global markets.
Conclusion
Nirmala Sitharaman’s address highlights the ongoing efforts of the Indian government to transform the country into a more competitive global player by simplifying regulations and fostering innovation. The focus on MSMEs, startups, and integrating the youth workforce with industry needs positions India for a brighter, more inclusive economic future.
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